Eurotunnel Barred From Operating Ferries on Competition Concern

Eurotunnel Group SA (GET) was barred by the U.K. Competition Commission from operating a ferry service between France and Dover in the U.K. on concern it would give it too much dominance on the Channel traffic route.

Eurotunnel will appeal the decision, the Paris-based company said in a statement. Competition authorities blocked the service for two years and set restrictions for another eight.

“It cannot be good for competition when Eurotunnel, which already holds a market share of over 40 percent, moves into the ferry business,” Alasdair Smith, deputy chairman of the competition commission said in a statement.

Eurotunnel acquired three ferries from French rail operator SNCF’s defunct SeaFrance ferry arm last year in the hope of augmenting its London-to-continent rail service with Calais-to-Dover on-water operations. The service, rebranded MyFerryLink, would have provided backup capacity when travel through the tunnel is disrupted, the company had argued.

“This decision by the Competition Commission will reduce the choice of services across the Straits of Dover to the detriment of the consumer,” said Jacques Gounon, Eurotunnel’s chairman and chief executive officer. “It will inevitably lead to an increase in the price of a crossing.”

Anti-trust officials determined that Eurotunnel acquired SeaFrance assets, including three vessels, to stymie competition by keeping Copenhagen-based DFDS A/S (DFDS) from buying them, the Competition Commission said.

Forcing a sale of some of the ships could have caused delays, it said. Nevertheless, Eurotunnel could sell the two largest ferries approved by the regulator to gain clearance to operate to Dover in two years, the competition authority said.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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